Citigroup (NYSE: C) remains consistently at the top of the New York Stock Exchange’s volume leaders list on a daily basis because has 28.62 billion outstanding shares and a market-cap of $130 billion. With Citigroup’s stock price consistently trading below $5.00 since the beginning of 2009, investors are beginning to murmur as to whether or not Citigroup (NYSE: C) will engage in a reverse stock split.
During the company’s last two annual shareholders meetings, votes from shareholders allowed the bank’s board to explore and the possibility of a reverse stock split. Even the U.S. Treasury voted in favor of the reverse stock split measure, saying in a statement that the split “will address the fact that the company has a much larger number of shares outstanding than is necessary to ensure adequate trading liquidity.”
At the company’s annual meeting, some shareholders suggested Citigroup undergo a reverse stock split, arguing that if the company had a higher base share-price, its stock would be perceived to be more attractive to institutional investors. Those opposed to the stock split said that speculative investors would short Citigroup’s stock and put downward pressure on the stock, mooting the point of the reverse split.
Citigroup’s board of directors had the option to expedite a reverse stock split through the end of September at ratios between 1-for-2 and 1-for-30. That was extended through June 30th, 2011 at its recent annual investors meeting.
Although not much has come out of Citigroup’s board, traders have been heavily discussing the prospect on Yahoo Finance’s message boards.
Citigroup declined to comment on the speculation of a reverse stock split.
